High Pressure Cogeneration for Sugar Sector in Pakistan...High Pressure Cogeneration for Sugar Sector in Pakistan Activities • Training of technical staff of sugar mills on standardized

EUROPEAN UNION

High Pressure Cogeneration for Sugar Sector in Pakistan

High Pressure Cogeneration for

Sugar Sector in Pakistan

EUROPEAN UNION


EU SWITCH-Asia

Programme

Background • Initiated by the European Union and in line with the Regional

Strategy for Asia 2007-2013, managed by EuropeAid

• Promote sustainable consumption and production practices in

Asia by mobilizing the private and public sector

Priority Focus • Move SCP efforts from demonstration to replication

• Catalyze a shift in policy making towards sustainability

EUROPEAN UNION


HP Cogen-Pak

Project

Project Objective • Promote sustainable production of energy, for export of surplus

electrical power to the national grid, through replication of

existing high pressure cogeneration technologies in the sugar

sector

• Promote sustainable consumption of bagasse by supporting

sugar mills in the adoption of high pressure cogeneration

technology through

– Technology standardization

– Enabling access to finance

– mobilization of relevant public sector authorities for the

formulation of a conducive regulatory regime for bagasse

based power projects.

EUROPEAN UNION


HP Cogen-Pak

Project

Project Partners 1. IHT Pakistan

2. The Energy and Resource Institute India

3. Sequa Germany

4. Pakistan Sugar Mills Association

EUROPEAN UNION


Project Components

Financial Component

Awareness raising of FIs

regarding financial viability

of HPC technology

Improved capacity of FIs to

assess financial viability of

HPC projects

70 Pre-Feasibility Studies,

10 Feasibility Studies, 3-5

Local Technology

Providers of HPC

Technology

Output Result Component

Technology Component

Development of standardized

technology specifications &

capacity building of Sugar

Mills and local Technology

Providers

Sugar Mills confidence in

HPC technology Switch and

Local Availability of HPC

Technology

5 FIs offering financing for

HPC Technology, Financial

Closure of 10 HPC Project

Regulatory Component

Orientation of Power Sector

Player and stakeholders on

best practices power

purchase policy

Revised Power Purchase

Policy

Conducive regulatory

regime which will attract

Sugar Mills to invest in

HPC technology

EUROPEAN UNION


Component 1:

Training and Capacity Building of the Sugar

Sector and Technology Providers

Activities • Establishment of a National Bagasse Power Support Cell at the

PSMA, to offer technical, financial and regulatory assistance to

its members,

• Development of standardized technical specifications based on

regional best practices for high pressure equipment design and

operation, and preparation of project implementation tender

documents based on consultation among technology providers

and sugar mills,

• In-house trainings and capacity building of Technology Providers

to develop standardized HPC technology solutions

EUROPEAN UNION


Activities • Training of technical staff of sugar mills on standardized design

and technology selection

• Development of business cases of technology switch to HPC for 70 sugar mills

• B2B linkages between local and Indian technology providers of HPC systems

Outputs • 3-5 local technology providers offering technology solutions for

HP Cogeneration

• Sugar sector trained on HP technology selection and project management

• 70 pre-feasibilities for HP cogeneration systems developed, resulting in feasible business and investment plans

Component 1:

Training and Capacity Building of the

Sugar Sector and Technology Providers

EUROPEAN UNION


Training and Capacity Building of the

Technology Providers Like HMC, KSEW &

Fabcon

HP Cogen-Pak conducted three Phases In-house training for

technology provider HMC, KSEW & Fabcon to enhance their

indigenous capacity in thermal and mechanical design of HP

boilers and design accessories of HP boiler etc.

Training at HMC, Taxila

Training at KSEW, Karachi

Training at Fabcon, Lahore

EUROPEAN UNION


Two weeks Boiler Manufacturers Capacity building training for Pakistani

Boiler Manufacturers was held in Faridabad, India. This training was

conducted by National Power Training Institute (NPTI) with the

collaboration of The Energy and Resources Institute (TERI) from 13th to

25th of March, 2016. The participants of the training were experts from

Descon Engineering & The Industrial Enterprises.

Training of Boiler

Manufacturers at NPTI,

India

EUROPEAN UNION


Component 2:

Improving Access to Finance

Activities • Financial risk assessment of bagasse based power projects

• Development of toolkits for SBP’s Schemes for Financing Power

Plants Using Renewable Power, and the Credit Guarantee

• Trainings of the 5 major FIs in Pakistan on bagasse based co-

generation projects and developed toolkits

• Training of sugar mill financial departments on toolkits and

CDM

EUROPEAN UNION


• HP Cogen-Pak project team including international expert held a

series of meeting with the commercial banks of Pakistan &

financial institute to ascertain their existing lending practices

and documented their concerns in financing HPC projects.


Meeting with Pak Brunei Investment, Karachi.

Meeting with Meezan Bank, Karachi

Meeting with Habib Metropoliton Bank, Karachi.

EUROPEAN UNION


• Ensuring financial closure for 10 HPC projects,

• Development of project design document for CDM financing for

10 projects

Outputs • 5 FIs offering services to finance sugar sector HP cogeneration

projects

• Capacity building of the sugar sector to avail financial

opportunities

Component 2:


EUROPEAN UNION


Development of Detailed Feasibility Studies

for Sugar Industries

Sugar Mills Name Sugar Mills Name

1. Shahtaj Sugar Mills Ltd. 2. Bandhi Sugar Mills (Pvt. ) Ltd.

3. Safina Sugar Mills Ltd. 4. Faran Sugar Mills Ltd.

5. TYA Sugar Mills (Pvt.) Ltd. 6. Ansari Sugar Mills (Pvt.) Ltd.

7. Shakarganj Mills Ltd.-I 8. Shakarganj Mills Ltd.-II

9. Mirpurkhas Sugar Mills Ltd. 10. Mehran Sugar Mills Ltd.

EUROPEAN UNION


Component 3:

Development of a Conducive

Regulatory Regime

Activities • Establishment of Multi-stakeholder platform for bagasse based

power systems

• Orientation of NEPRA on regional Best Practices of tariff

determination for bagasse power projects, especially India,

through regional stakeholder consultations

• Development of toolkit for swift tariff determination and

approval for bagasse based projects

• Conducting Multi-stakeholder consultations on the adoption of a

New Power Purchase Policy (i.e. Upfront Tariff)

Outputs • Improved process for tariff determinations

• Improved policy environment for bagasse based cogeneration

projects

EUROPEAN UNION


• HP Cogen-Pak Project organized the Capacity Building Program

for NEPRA official from 7th September 2015 to 11th September

2015 in NEPRA Tower Islamabad. Training was provided by the

experienced consultants from TERI, India.

Development of a Conducive

Regulatory Regime

EUROPEAN UNION


• HP Cogen-Pak organized the two workshops Regulatory

Framework and Up-front Tariff for Bagasse based HP

Cogeneration Plants in Sugar Mills in Pakistan.

• One Workshop was arranged on 5th January 2016 in Lahore and

2nd workshop was conducted on 12th January 2016 in Karachi.

Workshops on Regulatory

Framework and Upfront Tariff

Workshop at Lahore Workshop at Karachi

EUROPEAN UNION


Working Paper is prepared on Increased uptake of

HPC Technology by the Sugar Sector in Pakistan.

All the stakeholders were consulted through

meetings. On the basis of their feedback barriers

are highlighted which are hindering uptake of

HPC technology.

Working Paper for

Accelerated Uptake of HPC

EUROPEAN UNION


• Technical Barriers

– High Upfront Cost

– Grid Interconnectivity Studies

– Capacity of local technology providers

– Potential risks of technology

– Safety RisksEconomics of Bagasse

Working Paper for


EUROPEAN UNION


• Regulatory barriers

– EPC Cost in Upfront Tariff

– Timeline in Legal Framework

– Reimbursement of Taxes and other cost in Upfront

Tariff

– Environmental Guidelines

Working Paper for


EUROPEAN UNION


• Financial Barriers

– Awareness of Banks and Funding Agencies on HPC

– Credit Enhancement Instruments

– Use of State Bank’s Renewable Financing Facility

– Risk Profile of Sugar Mills

Working Paper for


EUROPEAN UNION


• There is a need to revisit the foreign and local component in upfront tariff.

• NEPRA should consider the transportation cost in upfront tariff.

• There is need for adding more flexibility in the timelines of existing legal framework especially after acceptance of upfront tariff.

• NTDC should build the capacity of DISCO’s to undertake grid interconnectivity studies. Furthermore, NTDC should publish standardized specifications and design for grid connection to be adopted by power exporter.

• Govt. should issue an SRO which provides exemption to sugar mills from payment of custom duties on import of High Pressure Cogeneration System and its allied equipment.

Way Forward

EUROPEAN UNION


• State Bank of Pakistan should encourage local financial

institutions on investing in renewable energy projects

• State Bank of Pakistan should increase the capacity limit of 20

MW for bagasse based power plants as the size of most of the

plants exceeds this limit

• GoP should encourage the manufacturing of steam turbines in

the country to build the indigenous capacity

Way Forward

EUROPEAN UNION


Thank You for Your Kind Attention

Documents

High Pressure Cogeneration for Sugar Sector in Pakistan...High Pressure Cogeneration for Sugar Sector in Pakistan Activities • Training of technical staff of sugar mills on standardized